Sign In

Skip Navigation LinksOneFPA > About > Press Room > Study Finds Financial Advisers are Falling Short on Business Growth Goals


2014 Drivers of Business Growth study of the FPA Research and Practice InstituteTM reveals more than half of advisers believe they are failing in business development

DENVER – When it comes to business development, one thing is clear: despite the fact that financial advisers place a high level of importance on having a plan and process in place to attract new clients, they almost universally agree that there is significant room for improvement, revealed the 2014 Drivers of Business Growth study by the FPA Research and Practice InstituteTM (RPI) – a program of the Financial Planning Association® (FPA®).

The study – which included the input of 434 professionals across the country, including FPA members and non-members, CERTIFIED FINANCIAL PLANNER™ (CFP®) professionals, advisers across all channels and a wide range of business sizes and models – was conducted as a result of RPI’s inaugural The Future of Practice Management Study last fall that revealed business growth as a major challenge in today’s financial advisory businesses.

“Our inaugural study revealed that most advisers are struggling to grow their businesses in a way that is directly impacting their bottom line,” said Lauren Schadle, CAE, FPA executive director and CEO. “This study probed further into the matter and uncovered that while many advisers try similar business growth tactics, it is those advisers who think and plan strategically about their businesses who are succeeding in adding new clients and assets.”

In collaboration with Julie Littlechild, Founder of New York-based Advisor Impact, the study, found that most respondents are facing a series of challenges relating to business planning and marketing, which are directly impacting their ability to grow. Challenges uncovered in the study include:
  • Only 9% of respondents indicate that their business development process is ‘very effective’ and over half give themselves a failing grade.
  • ​Thirty-five-percent of respondents fell short of their goals last year and only 25% exceeded their goals.
  • While 54% of respondents say having a strong culture of business development is important or very important, only 13% report that culture is very strong today.
  • Less than a third of respondents said they had a formal, written business plan, with 33% indicating they had defined growth goals, but not a documented plan.
  • Respondents feel challenged in executing on the tactics they consider to be very effective.
  • Respondents may not be prepared for the changing face of marketing with only 13% indicating they use this strategy to attract new clients.  Effectiveness ratings were muted and just under a third of respondents describe this as key to their business development plan going forward.
“The fact that only 25% of advisers exceeded their business growth goals in the past year tells us that they are either not taking the necessary steps to create a plan for growth or they are engaging in the wrong marketing strategies,” added Valerie Chaillé, CFP®, Director of the FPA Research and Practice InstituteTM. “Business planning, based on the business’ value proposition, is what should be driving the growth tactics employed by advisers. It is no surprise that the advisers who are failing to plan are not reaching their desired goals.”

While respondents are facing several challenges, the study did expose two solutions that can help them grow – the need for a clear, defined business plan and the need to focus on the right marketing tactics.

Clear and Defined Plan:
  • Defined Value Proposition – Fifty-seven percent of respondents who fell short of their goals had a defined value proposition, increasing to 79% among those who exceeded their goals. Similarly, 62% of respondents who experienced asset growth of less than 10% had a clearly defined value proposition, increasing to 76% among those who grew 20% or more. Advisers in this high growth group were also more likely to indicate that their team could communicate the value proposition very effectively.
  • Elevator Pitch – Somewhat related to value proposition is the ability for an adviser to clearly and concisely communicate value. While high growth advisers are somewhat more likely to have an ‘elevator pitch', it was less of an indicator of growth than defining the underlying value proposition.
  • The Business Plan – High growth advisers were considerably more likely to have a formal, written business plan (38%) compared to low growth advisers (21%). This distinction was even more profound among those who exceeded their goals (48%) compared to those who fell short of their goals.
  • Niche Market – Respondents who grew the fastest were more likely to focus on one or more defined niche markets (65%) than the lowest growth advisers (47%).
Focus on the Right Tactics
  • Center of Influence Referrals – Respondents who achieved faster growth were more likely to indicate they were working with centers of influence (68%) to generate professional referrals than those with the lowest growth (54%).
  • Client Events – Using client events as a way to both add value for clients and attract new clients was effectively used by respondents who were growing the fastest (58%) compared to those who were not (41%).
  • Thought Leadership – While a relatively low percentage of respondents are using this tactic, which includes building a personal brand or platform using thought leadership and social media, larger and growing businesses were more likely to be using this strategy.
“Sometimes data reveals subtle but very important trends,” said Julie Littlechild, Founder of Advisor Impact. “With this study, the fact that so many advisers referred to new forms of marketing such as thought leadership, content marketing and personal brand building, suggests we are moving into new territory.  It’s early days for this industry, however, the signs suggest that traditional forms of marketing may be changing. ”

A full report of the 2014 Drivers of Business Growth study is now available HERE​ and includes additional details and narratives on these issues.

“FPA endeavors to provide our more than 23,000 members, including 16,000 CFP® professionals, with one connection to opportunities for business success. The work we are doing through the FPA Research and Practice InstituteTM will help make all of our members better business owners now and in the future,” concluded Schadle.